Australia’s 10-year government bond yield hovered around 5.0%, near its lowest level since late August, as global bond markets rallied on rising safe-haven demand following a sharp selloff in technology stocks. Investor anxiety deepened after the Democrats’ sweeping victory in the US midterm elections stoked concerns that tighter regulation could slow AI investment, triggering a rally in US Treasuries that flowed through to Australian bonds.
The move lower in yields was further supported by the Reserve Bank of Australia’s 3 November decision. Although the RBA lifted the cash rate by 25 basis points to 4.85%, the hike was passed on a narrowly split 6–3 vote and was accompanied by less hawkish guidance, reinforcing expectations that policy rates have likely peaked.
Still, Deputy Governor Andrew Hauser cautioned that a loss of confidence in the RBA could make inflation more difficult and costly to control, potentially forcing a more forceful policy response. Interest-rate swaps now imply only about a 6% probability of another rate increase in December, while a 25-basis-point cut is fully priced in by year-end.
